Google To Require Its U.S. 'Shadow Workforce' To Receive Healthcare And A $15 Minimum Wage

Google just took a step to ensure its contract workers have better benefits. (Photo by Mason Trinca/Getty Images)

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Google just took a big step to ensure that its large number of contract workers receive better benefits and pay, an issue that has been the subject of employee protests for the past year.

The company will require that all its temporary and contractor workers based in the United States receive a $15 minimum wage by 2020 and comprehensive healthcare, including eight sick days and 12 weeks of paid parental leave, by 2022, the company said Tuesday.

Although Google is known for its high salaries and cushy perks, the company's "shadow workforce" of temporary, vendor and contract workers (known as TVCs), many of whom who are employed through outside firms like Adecco and Cognizant, typically make less, lack job security, and have to shell out higher costs for benefits. These workers hold positions in cafe operations, security, medical care and transportation, as well as highly specialized roles in programming and marketing. TVCs make up more than half of the company's global workforce — meaning at least 98,771 workers, which is the number of direct employees Alphabet reported in Q4.

The company didn't respond to a question about how many of its TVCs are U.S.-based.

Google's announcement didn't note whether those workers would be compensated through their original contracts or mention any policies around increased job security for TVCs generally.

Rachel Miller, a Google TVC whose contract ended on March 26 who was involved in worker organizing at the company, says that while the new policies are a major step forward, there is more work to be done.

"We're happy because we see this as a result of collective action: Lots of proposed changes are significant and wouldn't have been possible without a year-plus of TVCs and full-time workers collaborating on actions of all kinds, from statements to learning clubs to one-on-one meetings," she tells Forbes. "That said, there are lots of missing elements: The bulk of benefits won't be enacted until 2022, which means the majority of current temp workers won't reap the benefits, including those that advocated for the change."

The benefits are also still far behind what direct, full-time workers receive, she points out, and the new policy doesn't include information on ending forced arbitration.

While Google ended forced arbitration — a practice that prevents employees from taking cases to court — for employees and some contractors in February, those rules don't apply to workers hired through third-party firms.

While contractor minimum wage and benefits policies are new for Google, other firms implemented similar practices long ago: Facebook announced a $15 minimum wage and 15 paid days off for contractors back in 2015, and SurveyMonkey started giving contractors full benefits last year.

Here are the benefits that contractors will receive, via a note that Eileen Naughton, VP of People Operations, sent to employees on Tuesday, provided to Forbes by a Google spokeswoman:

Going forward, in order to do business with Google, all companies that employ U.S. vendors and temps will need to provide at a minimum:

Comprehensive healthcare for the employee and their dependents that includes hospitalization, preventative and wellness services, laboratory and emergency services, prescription drugs, mental health services, labor and delivery, newborn and pediatric services, oral and vision care, rehabilitative and habilitative care, and counseling. Plus a minimum of eight days of sick leave.

Higher minimum wage. While the vast majority of our extended U.S. workforce already receives at least $15/hour, by the end of the year, we’ll require employers of our U.S. extended workforce to pay their employees working at Google a minimum of $15/hour. In all locations where the minimum wage is more than $15/hour, we will require that vendors meet the higher requirement.

Education and upskilling. $5,000 per year in tuition reimbursement to learn new skills or take courses.

These are meaningful changes, and we’re starting in the U.S., where comprehensive healthcare and paid parental leave are not mandated by U.S. law. As we learn from our implementation here, we’ll identify and address areas of potential improvement in other areas of the world. Stay tuned for more to come as we continue our work in this area.